Where Does Your Business Go When You Need to Access Additional Funds for New Capital?

Even in the most predictable of times a family may find it difficult to meet all of the money demands that they face. In fact, with a budget in place and money set aside to serve as a cushion for unexpected emergencies and additional expenses, there are many families who struggle to make it from paycheck to paycheck.

Consider, then, how difficult it is for businesses to meet their obligations. With employees to pay and overhead costs of a building or equipment maintenance, many businesses also find themselves struggling to make it from one month to the next. Factor in the unpredictableness of the last six months and the pandemic and it is easy to understand why many businesses in America are facing significant financial challenges.

Invoice Funding Companies Help Businesses Fill in Gaps While They Wait for Accounts Receivable

Fortunately, there are resources that some companies have used for decades to make sure that they are able to cover overhead costs and pay salaries while they await payments from their customers. Even the businesses that have seen unprecedented activity during the pandemic have found themselves looking for advance business capital factoring so they can take advantage of the opportunities that presented themselves. For example, trucking companies that needed to immediately buy more trucks and trailers to meet the high demand of consumer buying at grocery stores may not have had enough cash reserves on hand to make these purchases. Likewise, the overtime and combat pay that many companies needed to give their employees during the initial weeks of Covid 19 may have stretched a normal company’s budget if they did not have access to additional, temporary funding.

Invoice funding companies provide both large and small small business invoice factoring as a type of accounts receivable financing that converts outstanding invoices due within 90 days into immediate cash for a business of any size. As a specific example, invoice funding companies can help small businesses bridge invoice payment gaps with upfront payments up to 90% of the original invoice. These monies are then paid back with interest as soon as customers make remit their payments to the business. Operating as a kind of revolving credit, this service provided by invoice funding companies helps many companies succeed while others fail. “The factor advances most of the invoice amount—usually 70% to 90%, after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction, sometimes called a factoring, fee, according to the Wall Street Journal.

Before the pandemic there are nearly 28 million small businesses in the U.S. Many of these businesses failed because health regulations required them to stay closed. Other businesses, however, saw more business than they ever could have imagined. A small cleaning company, for instance, may have had more requests for deep cleaning services in the first moth of the pandemic than they typically receive in a six month time span. Finding an affordable, reliable, and trusted way to access more capital to invest in more cleaning equipment and hire more employees was key to these small businesses not just surviving, but thriving.

Unfortunately, bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016, from 24,797 companies in the first quarter of 2016. The number of bankruptcies from the first six months of the pandemic, however, make these numbers seem miniscule. Truck factoring services and other kinds of similar resources offer the best kinds of ways for companies to seize the opportunities that present themselves. Without these resources even more businesses will fail to survive these most challenging of times.

Nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network. Everyone of these kinds of transportation components, however, require a financial investment and the cost of the driver and other workers involved. Finding the best place to access these financial resources is an important part of the success that some companies are seeing today. Individual families face their own kinds of challenges when it comes to difficult economic times, but it is important to realize that businesses face these same challenges, but on an even bigger scale.

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